Brands: Do you have the right coupon strategy?

Kristina: What impact are social networks - specifically Twitter and Facebook - having on digital coupons?

Jeffrey Hudson, Co-Founder, Grocery Coupon Network: Social networks are increasing the reach of coupons, which traditionally were limited to paper/FSI formats. 64% of shoppers regularly searched online for coupons online for CPG products in 2011 (NCH). Given that the consumer is looking to the internet first, it's likely that Facebook, which accounts for 25% of all US page views, would be a highly influential platform for merchants and retailers.

Kristina: We've seen some numbers from both coupon and group-coupon hubs showing the increase in coupon redemption. What is driving this growth?

Jeffrey: There's more demand for coupons (up 17 points in 2011 [NCH]), and there are less coupons being offered (down 8.1% in 2011), so I think that contributes to the increased redemption rates. The economic factors can't be ignored. Frugality is not a choice for a large percentage of the population, it's a reality. Combine that with easier access to coupons via digital distribution, and you have more demand and a more responsive consumer.

Kristina: How can retailers better use coupons to create customer loyalty?

Jeffrey: Ultimately, loyalty is going to be driven by the customer experience, not the discount. I would view coupons as a mechanism to create a better, more relevant dialogue with the customer. Knowing your customer preferences and delivering timely and relevant savings on what they need may be facilitated via the coupon and digital communication channels like Facebook and Twitter.

Kristina: What trends are you seeing in digi-coupons so far this year?

Jeffrey: For Grocery Coupon Network, the trend has been to move the coupon distribution to social media platforms, primarily Facebook. We developed an app that allows for seamless printing directly from our Facebook page.

We're also seeing a huge rise response to our Pinterest activity, which is less about driving coupon prints, and more about cultivating a lifestyle of savings. Our users have really embraced the medium.

Lastly, I would look for a continued move toward sustainable and proven couponing methods via online coupon codes and digital grocery coupons, both by consumers and the market (private equity and investors).

Tags: advertising, coupon strategy, ecommerce tips, Grocery Coupon Network, online coupons, social commerce, social marketing